Owning a apartment usually means owning a lease of the property, which has a set term of years. This lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Bishops Stortford. Inevitably, the period of lease left shortens as time goes by. This is often overlooked and only becomes a problem when the property has to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension. Eligible leaseholders in Bishops Stortford have the legal entitlement to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. Please give due deliberation before putting off your Bishops Stortford lease extension. Holding off the cost now likely increases the price you will ultimately have to pay to extend your lease
Leasehold properties in Bishops Stortford with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure Bishops Stortford lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Two years ago Harry, started to get near to the eighty-year mark with the lease on his garden apartment in Bishops Stortford. Having purchased his home 19 years ago, the unexpired term was of little interest. Luckily, he became aware that he needed to take action soon on Extending the lease. Harry was able to extend his lease just ahead of time last April. Harry and the landlord who owned the flat above eventually settled on the final figure of £6,000 . If the lease had dropped to less than eighty years, the price would have escalated by a minimum £850.
Last year we were e-mailed by Mr Jayden Patel , who completed a purpose-built flat in Bishops Stortford in April 2011. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Similar flats in Bishops Stortford with an extended lease were worth £191,000. The average amount of ground rent was £65 invoiced every twelve months. The lease terminated on 6 October 2084. Given that there were 58 years left we estimated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 not including fees.
In 2009 we were approached by Mr and Mrs. V Allen who, having acquired a first floor flat in Bishops Stortford in November 2005. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Comparative premises in Bishops Stortford with 100 year plus lease were in the region of £250,000. The average amount of ground rent was £50 invoiced quarterly. The lease elapsed in 2095. Having 69 years remaining we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of legals.